Question

determine whether the following statement is true or false. if the statement is false, make the necessary change(s) to produce a true statement. in simple interest, only the original money invested or borrowed generates interest over time. choose the correct answer below. a. the statement is false. the true statement is in simple interest, the original money invested or borrowed and any accumulated interest generates interest over time. b. the statement is false. the true statement is in simple interest, the original money invested or borrowed and any accumulated interest does not generate simple interest over time. c. the statement is true because simple interest is interest computed on the original principal as well as on any accumulated interest. d. the statement is true because simple interest is the amount of money that we get paid for lending or investing money, or that we pay for borrowing money.

Explanation:

First, recall the definition of simple interest: Simple interest is calculated only on the original principal (the initial amount invested or borrowed), and accumulated interest does not earn interest. The given statement says "only the original money... generates interest", which matches the simple interest definition. Now analyze the options:

• Option A: Claims simple interest includes accumulated interest, which is compound interest, so A is wrong.
• Option B: The statement about "does not generate simple interest" is confusing and incorrect as the original statement is true.
• Option C: Says simple interest includes accumulated interest, which is false (that's compound interest).
• Option D: The statement's reasoning about simple interest being the amount for lending/investing/borrowing aligns with the fact that simple interest is based on the original principal, so the original statement is true.

Answer:

D. The statement is true because simple interest is the amount of money that we get paid for lending or investing money, or that we pay for borrowing money